I used to think that by the time I turned 30, I’d be financially set. I sort of glamorized the fourth decade of life like Jenna from the film 13 Going on 30. Like, I graduated from college EIGHT years ago. I’ve got legit work experience, and I need anti-aging skincare! I deserve nice things and an awesome vacation, right?

Eh, maybe-maybe not. Movie characters in their 30s live in Manhattan apartments WAY too big for their movie character jobs (have you ever noticed that?), drive expensive new cars, sit on designer sofas, and are professionally styled.

What don’t 30-something movie characters do? Debt-busting, 401K investing, emergency-fund building, sinking fund saving, and all that other stuff that doesn’t make a glamorous movie. But it does make you REAL rich, instead of fake rich.

So if you want to be rich in REAL LIFE and not pretend rich like a movie character, avoid these major money mistakes in your 30s.

Letting those college loans hang around like a bad roommate

Guys, I hate to say it, but college was over a decade ago. It’s time to get rid of the school loans, along with the ratty college t-shirts shoved in the back of your dresser. Minimum payments feel manageable, but debt isn’t something to “manage,” it’s something to annihilate. The interest you’re paying just isn’t worth it, and imagine what you could do with that extra cash if it weren’t going toward paying off debt! As retirement expert Chris Hogan says, “Interest you pay is a penalty. Interest you earn is a reward.”

Buying a house before building an emergency fund

Owning a home was THE DREAM for me. We did apartment living for a LONG time, and I was sooo sick of it. I get it! I want you to own a home, too. It’s tough being confined to cramped living quarters, especially if you have kids, and especially when it seems like all your friends are buying houses and decorating with the Pottery Barn catalog.

But most people jump into the housing market before building an emergency fund of three to six months of living expenses, and this is a huge mistake! I can’t tell you how many clients in their 40s and 50s come to me with debt disasters primarily because they didn’t have the money to make emergency repairs and replace broken appliances. The last thing you want is for your house to be a financial burden. I know renting for now feels like a waste, but buying a house without an ample emergency fund is asking for serious trouble.

Not investing in a Roth IRA

We all know we should take advantage of our employer’s 401K match, but you’re giving up a major tax break if you’re not investing in a Roth IRA. With a traditional IRA, you get to invest tax deferred money, which is awesome for the current tax year (since the amount you invest is deductible), but you have to pay income tax when you withdraw the money in retirement. With a Roth IRA, you invest after-tax money (so no tax deduction this year), but it’s nontaxable in retirement. Including all the interest that’s been accruing for the last 30-some years. YAY! Ideally, you want to invest 15% of your gross income. Start with the percentage that your employer matches, then contribute the $5,500 max to a Roth IRA. If you’re still not at 15%, top off the rest with your work’s 401K.

Increasing your lifestyle with every raise

Yeah, you’re 30 and flirty and thriving (we are friends if you know the reference), but that doesn’t necessarily mean you can afford to spend more every time you get a raise. If you’re debt-free, have a full emergency fund, and are contributing 15% to retirement, then it’s totally appropriate to save for a vacation, buy a nice piece of furniture (with cash), or increase your restaurant budget. Just don’t go crazy and forget to save for medium and long-term goals, like your next car and the kids’ college funds. If you’re in debt or haven’t been able to invest 15% for retirement, then use raises to ramp up hitting those goals first.

Financing Large Purchases

A “good deal” is NOT based on monthly payment. Seriously, this monthly payment nonsense is getting out of control. The average car loan is now SEVEN YEARS. But I digress… suffice it to say this is not the time to get in the habit of financing appliances, cars, lawn mowers, mattresses, or anything else, even if it’s 0% down for a billion years. It’s easier to establish good habits now like saving up and buying with cash than it will be to clean up a mess later. Don’t tie yourself down to monthly payments other than your regular bills. Don’t you have enough bills already?

Instead, create a sinking fund for upcoming purchases. Simply divide the amount you need to have saved by the number of months you plan to save, and set aside that amount each month in a savings account. This works for everything: cars, Christmas, vacations, furniture, anything that’s a bigger expense than you can work into the monthly budget. A little delayed gratification and planning goes a long way in saving you money and the stress that a litany of payments inevitably causes.

If you’ve already made some of the mistakes on this list, it’s not too late to turn things around! You have a long time to invest and today is the perfect day to start making progress on your financial goals. A little discipline and commitment to a debt-free lifestyle will set you up for success for the rest of your 30s and will pay off big time for all the decades ahead.

Proper understanding of market risk is essential to your success as an investor. And let’s face it: whether we just want to dip our toes in the dark, murky waters of investing or are ready to dive in headfirst, we are ALL investors.

We all make choices about where to put our money. Whether it’s investing in our education, a basic savings account, or in an S&P 500 Index fund, anywhere we place money with the expectation of receiving a greater future return is an investment.

Most investing fears center on the stock market (and the bond market, but more on that another time). One day the market’s up, the next day it’s down, and we’ve all heard stories of that neighbor or relative who lost everything “in the market.”

I opened the envelope and was faced with a choice. Do I accept the plan that’s written here or forge my own path?

This letter was my golden ticket. All I had to do was sign and return, and grad school tuition would be covered. Taking out federal student loans would allow me to focus on academics without having to worry about how to pay next semester’s tuition. Once I graduated, I would certainly get a raise or a higher paying job, anyway.

Right?

It sounded reasonable. Then I thought about the years after graduate school, when I would be paying back everything I had borrowed, plus interest. I would have to find a higher paying job, even if it meant moving or doing something I didn’t enjoy. Staying at home with my children or working part-time wouldn’t be an option. Extra earnings wouldn’t translate into upgraded vacations, a better house, or more to stash away for retirement. Instead, they would go toward paying off debt, possibly for the next TEN YEARS.

While earning a master’s degree presented the opportunity to increase my earning potential, expand my career options, and take me wherever my dreams led, student loans threatened to take it all right back.

No, if I was going to do this, it was going to be paid for. With cash. End of discussion. So with that determination in mind, I put away the student loan offer, took out a blank piece of paper, and began to devise a plan.

Cash-flowing grad school (or college) is a bit like making a cross-country drive. You need to know your numbers, pace the journey, and use a roadmap.

First, know your numbers. Don’t take shortcuts here by only counting the base tuition—you wouldn’t set out on a road trip without having a reasonable amount of money for gas, food, and other necessities, so be sure to include all those educational extras like books and library fees.

If you’re attending online, do you need to buy a computer? If you’re attending a brick and mortar school, must you purchase a parking pass? Also, assume an annual tuition increase— the average is 6%. Better to slightly overestimate your costs and be pleasantly surprised than to come up short when the bill is due.

Are you experiencing sticker shock? That isn’t a bad thing!

The thing about paying with cash is it allows you to accurately assess the value of the degree you’re seeking!

Take this time to seriously evaluate whether the program of your choice is going to result in a financial return on your investment and if it’s reasonable expense. If the tuition is extravagant and you know there is no possible way to pay for it without loans, I ever-so-kindly-yet-strongly encourage you to research other options for school.

A little-known fact: very few professional fields care where you got your degree. I could have chosen a $60,000 master’s degree. Instead, I paid $30,000 for a state school that was just as valuable to potential employers. I have absolutely no regrets.

Here’s another benefit of NOT having student loans that rarely gets discussed: I am certain that I would not have had the opportunity to discover a fulfilling career if my job-searching decisions had been motivated by financial desperation.

Kind of ironic, huh? Remember that higher education should help propel you FORWARD in your life, not just give you another line on your resume.

Second, pace the journey. This is where you list out the classes you are going to take every semester and decide when you will graduate. There are so many factors involved, and your plan doesn’t need to look like everyone else’s.

First, learn the tuition structure for your school. Some charge by the unit, no matter how many classes you take. Others will charge by the semester for full-time students. If your program charges by the semester, you’ll get the best deal by taking the maximum number of units for the price. For example, if you pay $12,000 for a range of 12 to 18 units, you will pay less per unit if you take 18.

That said, it may not be feasible for you to take the maximum number of units all the time, and that’s okay. It’s all about knowing your options, weighing the pros and cons, and making a well-informed decision. Haphazard planning is costly; smart planning pays off.

Your job’s flexibility, whether you have a family, the course structure (online only? Hybrid? Brick-and-mortar?) are only some of the factors that will affect the speed at which you complete your degree. Consider what’s doable for YOU.

Once you have a course schedule outlined, it’s time to calculate the amount required for each semester or quarter based on the school’s tuition structure and the number of classes you’re taking.

This is the most critical part of the process. Skipping this part is like driving through West Texas hoping you have enough gas in the tank to get you to the next town. I want you to write a list of tuition deadlines and how much you need to have saved by each of those dates, along with the classes that correspond. The stakes are too high for mental guesstimations here!

Say the target is $4,000 every August and January for the next three years, and it’s April now. That means you need to save $1000 a month to have $4000 by August and $800 a month between August and December.

If you look at the numbers and think no way is this possible, brainstorm ways to earn extra money in the summers, review your budget and see where you can cut expenses, and if the numbers just don’t make sense, then it may be necessary to revisit how many classes at a time you’re taking. This brings us to the last step.

Use a roadmap. If you’re serious about seeing that tuition money pile up, using a written budget is CRITICAL. I’d even go so far as to say this is non-negotiable. There’s no sense paying for school with cash and putting basic living expenses on a credit card or not having enough money set aside for an unexpected car repair.

If you don’t use a budget, I can almost guarantee that your efforts to pay for school will go to waste, because you will either end up using tuition money to cover emergencies, or finance your lifestyle at a 20% interest rate.

Ask yourself, what am I willing to do in order to save the money for school? Are you willing to stop eating out? Will you work 60 hours a week in the summer? Will you move to a cheaper apartment in an area of town that isn’t your first choice?

I won’t sugarcoat it: this isn’t an easy endeavor, it’s going to require grit, but it is ABSOLUTELY possible and WORTH every bit of effort. The reward of cash-flowing your education will far outweigh the short-term sacrifice and self-discipline. You don’t have to settle for student loans. You CAN graduate debt-free!

Do I pay the high interest loan before the student loans? What if I owe the IRS? Should I get the car repaired or pay the credit card? Should I take advantage of my employer’s 401K match or pay cash for graduate school? How much do I need to save for retirement? How do I balance long-term goals and short-term savings?

Life doesn’t fit into a neat little box, no matter how hard we try, and to make matters more complicated, it seems there are twenty different answers on the internet for every one financial scenario. It’s like trying to find the best cheesecake recipe when you’ve never made a cheesecake. There’s no reference point. And this a little more important than a cheesecake.

So instead of prescribing an intricate scheme that looks nice on Pinterest but doesn’t translate to real life, I want to take you through the Seven Baby Steps. Designed by Dave Ramsey, the Seven Baby Steps is your surest, fastest way to building (and keeping) wealth. Keep in mind, this is not a get-rich-quick kind of deal, but a principles-based plan that—if you follow it without skipping steps—will allow you to build wealth over time.

Baby Step 1: Save $1000 as a starter emergency fund. Save up $1000 as quickly as humanly possible and put it into a separate savings account, preferably a money market account where you’ll get a little interest. Order some checks, and your starter emergency fund is all set. This must be complete before moving to step two, or you will almost certainly get stuck in a debt cycle whenever a minor emergency pops up.

Baby Step 2: Pay off all non-mortgage debt. Make a list of debts, starting with the smallest balance and ending with the highest balance, regardless of interest rate. Pay the minimum payments on everything except for the smallest debt. As you cross off each debt on the list, add the payment from the previous debt onto the payment for the next one.

Baby Step 3: Complete your emergency fund, which consists of three to six months of living expenses. Whether three, six, or somewhere in-between, you’ll want to have several months of living expenses set aside (not your whole paycheck, just what will cover basic expenses). This is like an insurance policy that creates a buffer between you and any life events or significant financial emergencies.

Baby Step 4: Contribute 15% of your gross income to retirement accounts. This one can be painful to wait for, especially if your employer offers a 401K match and you’re still in Step 2, but trying to manage debt and invest is counterproductive to wealth-building. It’s like trying to plant a garden over a mess of weeds. You won’t be able to harness the power of your biggest wealth-building tool—your income—when you’re strapped with debt. Clean up the debt first, then focus on investing.

Note: Steps 4, 5, and 6 are done concurrently.

Baby Step 5: Save for college. If you have little ones, they will most likely go to college or trade school, and that takes a lot of money. The earlier you can start saving, the better. Even if you aren’t able or do not plan cover your child’s entire tuition bill, there are some excellent (and some terrible) tax-deferred investment options to help your future scholar. Take caution: don’t become overwhelmed by rising tuition costs and sacrifice Step 4. Retirement is going to happen and there are only so many ways to pay for it. However, there are several ways to fund college that don’t involve going broke.

Baby Step 6: Pay off the house early. Can you imagine what it would be like not to have a house payment? Amazing hardly begins to describe it. That’s so much money! Better yet, it is possible to accomplish: those who follow this plan pay off their house in an average of seven years.

Baby Step 7: Build wealth and give generously! Because at this point, there’s nothing else to do! I love the focus on giving here, because building wealth isn’t the same as wealth hoarding. What we do with what we have matters more than how much we have.

Life will always be complicated, but having a plan will help you stay focused and on-track. The Seven Baby Steps is a tried-and-true process for staying out of debt and building wealth.

Hi there! I’m Lauren.

I'm a Dave Ramsey-trained financial coach, wife to Kyle, mom of twin girls, and a follower of Jesus. I believe that personal finance shouldn't be complicated or overwhelming, and that with a plan, you CAN achieve your financial goals.